Majority of the small scale units use old techniques of
production and outdated machinery and equipment. Upgradation of the technology
and achieving economies of scale is one of the major problems facing the
sector. They cannot afford new machines and equipments and are therefore
not in a position to use the latest techniques of production. They do
not find it possible to conduct research and development on a continuing
basis. Therefore, productivity and quality in small scale firms tends
to be low while unit cost of production is generally high.
But with liberalization of the economy, the MSMEs are facing
stiff competition from imports and need technological upgradation in order
to produce better quality products at cheap rates.
As far as sourcing technology is concerned, small businesses
face the following three essential problems:-
- Obtaining information about technology is the first important
issue. For most of them, information about available technology options
is through word of mouth or from a visit to an advanced unit. Few have
access to technical literature, professional journals or information
about new product launches. But with the advent of internet, new vistas
are opening up through electronic journals, catalogue downloads and
advanced search facilities.
- Actual procurement of the technology is the next important
issue because even if information is obtained, there are barriers to
import of technology and other problems relating to technology transfer,
vendor capability, after sales support, import procedures, etc which
impede procurement.
- Acquiring finance for technology upgradation is also
a problem. Small enterprises generally look to external sources of funding
for upgrading technology as withdrawing money from business entails
its own costs.
With a view to foster the growth of MSME sector in the
country, government has taken up several initiatives:
ISO
9000/14001 Certification Fee Reimbursement Scheme was introduced
in order to incentivise technological upgradation, quality improvement
and better environment management by the MSEs. The scheme provides incentive
to those small scale/ ancillary undertaking who have acquired ISO 9000/ISO
14001/HACCP certifications.
In order to reduce the cost of funds,
a scheme called Credit
Linked Capital Subsidy Scheme (CLCSS)
for Technology Upgradation in Small Scale Industries has been put into
place. It aims at facilitating technology upgradation by providing upfront
capital subsidy to small scale industry units, including tiny, khadi,
village and coir industrial units, on institutional finance (credit) availed
of by them for modernisation of their production equipment (plant and
machinery) and techniques.
National
Manufacturing Competitiveness Programme (NMCP) has been launched
by the government in order to help MSMEs improve their competitiveness.
The schemes under this Programme are aimed at addressing the technology/quality
upgradation needs of the sector, mainly in the public-private partnership
mode.
Small Industries Development Bank of India (SIDBI) in collaboration
with United Nations-Asian Pacific Centre for Transfer of Technology (UN-APCTT)
had established Technology
Bureau for Small Enterprises (TBSE) to bring synergy between Technology
and Finance for Small and Medium Enterprise (SME) sector. The objectives
of the company are to:
- provide professional services for technology transfer
in order to enhance market competitiveness of small and medium enterprises
and promote sustainable development.
- maintain and provide data base on technology options
available from different countries.
- provide micro small & medium enterprises information
on sources of technology and means of accessing them.
- provide background information on technology seeking
enterprises to technology suppliers and collaborators.
- identify business partners willing to collaborate and
extend support to tie up financial assistance and other requirements
such as drafting agreements, obtaining various approvals and preparation
of business plans required for transfer of technology.
- provides financial syndication through banks and financial
institutions.
Besides, National
Small Industries Corporation Ltd. (NSIC) has taken up an initiative
to enhance technology options for small scale industries. An ISO 9001
certified company, it has been working to fulfill its mission of promoting,
aiding and fostering the growth of small scale industries and industry
related small scale services/business enterprises in the country. Over
a period of five decades of transition, growth and development, NSIC has
proved its strength within the country and abroad by promoting modernization,
upgradation of technology, quality consciousness, strengthening linkages
with large medium enterprises and enhancing exports - projects and products
from small industries.
Also, Small Industries Development Organization (SIDO)
has set up 10
Tool Rooms and Training Centres in the country in order to assist
small scale units in their technical upgradation by providing good quality
toolings.
Further, in order to facilitate investments for technological
upgradation and higher productivity in the micro and small enterprises,
the phased deletion of products from the list of items reserved for the
exclusive manufacture by such enterprises is being undertaken.
^ Top
